Weekly Article 01-16-2019
Many years ago I stopped watching virtually all “news” shows. It started out by me wanting to see what happened in the world over night as I was waking up, and what implications there may be to my investments in the day ahead. It was many years ago that I started to notice that all that was being reported was totally unimportant. In the years that followed it appears to me that “news” shows have become nothing but propaganda that is put out as “news” and it is disguised with humor and the opinions of those that are supposed to be reporting news when, in reality, they are just putting on a show and, in my opinion, focusing on stories that mean nothing when it comes to having any impact on our lives.
How is it that someone cheating on his wife impacts you? How does something a President or any politician said 10 years ago impact your life? How does a 12-year old drag queen in New York impact you in any way? Of course, it probably shows how far we have fallen in our morality but how is this big “news”?
I believe this is all a distraction to keep our minds off of how the country is going so far into debt that there is no way we could pay back the debts we have run up with our US dollar having anywhere near its current perceived value.
Even the financial game shows keep your eyes fixed on the stock market while there are major warnings showing up in company earnings reports and expectations going forward, falling trade numbers, bond yields spiking and prices falling on the riskiest debts, and much more.
Some of the major news that is receiving little to no attention in our mainstream media is:
The “Yellow Vest” movement in France, which has spilled into other countries, is being met with more and more hostility by their masters in Paris. This weekend, the police were out in full riot gear and armed with automatic rifles. Of course, as the people are out protesting because they can’t afford to live while paying taxes to their masters, those “in charge” make the announcement that they are sending a BILLION euros to Iraq to help rebuild that country.(ABC NEWS) That will help calm those folks down I’m sure!
This is similar to our country where I see record numbers of homeless people on our streets and in our shelters and we supposedly have no money to help them but we can send billions around the world and stick us with the bill- which is happening as I write this right now. In addition to that there are many who would like to forget about our own and bring in more people that we won’t be able to take care of.
The TBFT (Too Big To Fail) banks are seeing their share prices crushed globally and the recently released earnings reports are showing glaring weaknesses. Wells Fargo released their results on Tuesday and mortgage lending, one of their strengths, has been declining in a concerning way. This is the second pullback in a row but with rising rates in the third quarter of 2018 it was no surprise that mortgage lending would slow. It was anticipated, however, that with rates pulling back in the fourth quarter business would pick up. It didn’t! To put this in context, according to Wells own reports, just six years ago the bank did over $125 billion of mortgage originations in the fourth quarter of 2012. That was the weakest quarter of 2012. In 4Q 2018 the bank did $38 billion in mortgage lending. This is over 66% lower than it had been and $8 billion less than in the third quarter of 2018. This is an ominous sign for real estate in my opinion. Of course, in the report it also noted that expenses are going up for deposits because of rising interest rates.
The actual cost to the bank is double what it was just a year ago.
JP Morgan also had some dismal numbers mostly related to trading revenue. Of course, I have said many times that this bank is more like a gambling casino and the numbers, I believe, bear that out.
Citigroup, Deutsche Bank, Banca Carige (now being run by the ECB) take your pick. It is ugly.
I have been warning for at least 6 months that a global economic slowdown was taking place. I believe this round of earnings reports will verify that to be true.
Another interesting tidbit is that global M1 money supply (basically the most liquid of assets that can be turned into cash) has gone negative. This has happened only 4 times in the past 38 years. 1981 Latin American Crisis, 1990 USA Savings and Loan Crisis, 2000 Tech bubble burst and 2008 housing bust and recession. Actually, according to Zerohedge “global money supply growth (using M1) is now flirting with the lows seen in mid-2008.
There are wars and growing discontent globally but there is a virtual blackout here in the USA- at least from what I see. We are arming Saudi Arabia as they conduct a brutal war with Yemen. The Turks are massing a massive force at the Syrian border and are threatening the Kurds, in Ukraine it appears that their puppet government (set up by the USA) is doing all that it can to provoke Russia into doing something stupid. I believe Putin is too smart to fall for it anyway.
China and Russia have developed hypersonic missiles that it is reported we have no answer for. Russia has anti-aircraft systems so good that they can take down our best aircraft. As a matter of fact, Turkey, a NATO member, is buying the Russian version of anti-aircraft missiles rather than our version.
Of course, if people were aware of the precarious nature of our economy and our standing in the global hierarchy they may get concerned just a bit and try and prepare for a change in paradigm that appears[mS1] imminent to me.
Since I search out the news rather than watch what the propaganda stations put out I have come to the conclusion that most people are either uninformed because they really don’t care or are misinformed because they watch propaganda 24 hours a day 7 days a week.
To those who have taken the time to look past the headlines and dig in to what appears to be taking place I hope that you are preparing for times that will likely be different from any we have seen in the recent past. It is likely that in a few short years the USA will not be the center of the universe economically, militarily or otherwise. It is likely that our currency will lose most of its remaining 4% of value left since 1913. It is likely that those who have prepared may flourish while those who have not prepared may perish. By perish I hope that doesn’t mean pass away but their hopes for the future may perish if they don’t take action shortly in my opinion.
Since the world has been shown that central banks can “print” unlimited amounts of cash and at virtually no cost- the value of these currencies is virtually nothing if the confidence in the currencies does not exist. I believe that with the actions taken in the past few years this confidence is on very thin ice. I believe this is why the central banks, countries and large banks are all loading up on gold and silver so that if confidence in these fiat currencies dissipate as throughout history there is a 100% success rate of doing, there will be real assets available to start a new system. This could also be why the Japanese Central Bank, the Swiss National bank and sovereign wealth funds are all buying stocks, bonds, etc. to cushion the loss of purchasing power of their currencies.
It seems complicated but it’s pretty simple. Those that can “print” money- meaning that they have basically unlimited resources and can supposedly “print” all of their problems away are still buying gold- WHY??? The only conclusion I can come to is that they KNOW the “printing” will cause confidence in the currency, at some point, to implode. If anyone can think of any other reason that people who have unlimited purchasing power with their currency creation would buy gold and silver I’d like to hear it.
Mike Savage, Financial Advisor
2642 Route 940 Pocono Summit, Pa. 18346
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